October 7, 2008

Italian and German Governments Back Lufthansa-Alitalia Deal

The Italian and German governments have backed a potential agreement which will enable Lufthansa to pick up a minority stake in the beleaguered airline Alitalia, according to Reuters.

The CAI consortium, which has offered to salvage Alitalia, has said that it will select a foreign partner for the airline shortly. Lufthansa and Air France-KLM are seen as possible partners, with industry sources predicting that the German airline will be successful in its bid.

The Italian prime minister Silvio Berlusconi and German chancellor Angela Merkel have welcomed the deal and said that it is up to the airlines to decide if the deal is appropriate.

Mr Berlusconi has thrown his weight around salvaging the Italian flag carrier and has pressed for a bankruptcy law amendment to allow the bifurcation of Alitalia for the subsequent bailout by the CAI consortium.

Alitalia's nine unions have backed a renewed offer by CAI, following earlier discord which threatened to ground the airline, according to Reuters.